TAX FILING UPDATE | Child Tax Credit 2024 | Senate Vote Delay

Learn about the Child Tax Credit’s current benefits and upcoming changes, including how it could affect your family’s refund and finances. Discover why the Senate’s decisions might delay these changes and what the IRS suggests for your tax filings.

Here, you’ll learn about the Child Tax Credit, including its current benefits, upcoming changes, and how it might grow with inflation. We’ll also dive into the legislative process, explaining why there might be delays in the Senate and what that means for families. You’ll find out what the IRS recommends for filing your taxes during this uncertain time and get tips on whether to file now or wait. Plus, we’ll cover how the Child Tax Credit impacts different families, especially considering the proposed increases over the next few years. This information is for anyone wanting to understand how these changes could affect their tax returns and financial planning.

Here, we’re diving into the latest updates on the Child Tax Credit bill—why it’s delayed, what’s causing the hold-up, and most importantly, what it means for you.

The Child Tax Credit Expansion Bill successfully passed in the House of Representatives and is currently under consideration in the Senate. If enacted by President Biden, it will retrospectively affect the 2023 tax year, offering additional tax benefits to eligible taxpayers.

Child Tax Credit

Currently, the tax credit offers a break of up to $2,000 per child, with potentially $1,600 of that being refundable.

The bill would raise the amount of the credit available as a refund, increasing it to $1,800 for 2023 tax returns, $1,900 for the following year, and $2,000 for 2025 tax returns. The bill also adjusts the topline credit amount to temporarily grow at the rate of inflation.

This bill is a segment of a broader $78 billion bipartisan tax-break package. According to the Center on Budget and Policy Priorities, it is projected to significantly benefit many taxpayers

However, Now, the bill’s still waiting for a Senate vote, and it’s expected to pass there too. The Senate vote is crucial for the bill’s future. But here’s the million-dollar question: why the delay?

Basically, the Senate’s got its hands full right now, making the Child Tax Credit bill take a backseat for the moment. And next they have a recess that begins shortly, So looks like it will take longer to pass. Also there is still opposition to the bill from many, so getting through the senate is not guaranteed.

Though since it did make it through the house of representatives, we are still hopeful that it will make it through the senate at some point, at which point it would be signed by President Biden.

Tax Filing your Taxes

So what should you do in regard to filing your taxes?

The IRS Commissioner has given crucial advice in light of these developments. He recommends not delaying tax filings because of anticipated changes to the child tax credit. The IRS intends to automatically update returns for those who file before the legislation is implemented. This means taxpayers do not need to take any extra steps. And that means the IRS would sent you any additional refund that you are due.

As of now, the IRS is preparing for more than 146 million individual tax returns by the April 15 deadline. Commissioner Werfel’s guidance is clear: file when you’re ready, especially if you have all the necessary information for a complete and accurate return.

A consideration for taxpayers is whether to file now or wait for tax software and filing methods to be updated with the new laws.

If you file now, you risk using the old rules, but the IRS will automatically update your return if the bill passes.
If you wait, you might file under the new rules without requiring IRS adjustments, but this could delay your refund.

For those not directly affected by the bill, such as individuals already receiving the full $2,000 child tax credit per child or those without qualifying dependents, filing now is advisable.

For others, the decision depends on individual circumstances. Filing now might mean the IRS will need to adjust your return later, while waiting could ensure your return reflects the new rules but may delay your refund. Once again, the general recommendation is to file now, as you will eventually get any additional benefit if the bill passes.

As always, Stay informed and consider your options carefully and consult with a tax professional for personalized advice.

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Money Instructor does not provide tax, legal, or investment advice. This material has been prepared for educational and informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or investment advice. You should consult your own tax, legal, and investment advisors regarding your own financial situation. Although the information has been researched and vetted beforehand, it may not be current at the time of viewing. Please note, the context of financial investments can be complex and dynamic, necessitating professional advice tailored to your unique circumstances.